SHANGHAI, Dec 29 (Reuters) - Chinese iron ore futures jumped nearly 3 percent on Friday as investors bet that steel mills in the world’s top buyer of the ore will restock the raw material ahead of an expected end in March to steel production curbs imposed to cut pollution.

The surge on the final trading day of the year meant the futures posted an annual jump of 16.5 percent, the second straight yearly gain.

Iron ore on the Dalian Commodity Exchange was up 2.7 percent to 531.5 yuan ($81.67) a tonne by Friday’s close.

Chinese steel mills in 28 cities were ordered to slash production from mid-November until mid-March to reduce emissions of pollutants as part of Beijing’s determined drive to cut smog. But the mills affected are expected to resume output after the curbs expire.

“Iron ore is rising as there is expectation that steel mills would recover production and they need to make bookings ahead of that,” said Bai Jing, an analyst with Galaxy Futures in Beijing.

In other Dalian commodities, coking coal also rose 1.4 percent to 1,313 yuan a tonne and jumped 15 percent in the year of 2017, while coke stood almost steady at 1,979.5 yuan a tonne, up 35 percent for the year.

The most active rebar on the Shanghai Futures Exchange rose 0.8 percent to 3,794 yuan a tonne. Rebar futures surged 47 percent for 2017, the second annual gain.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB stood unchanged at $72.62 a tonne on Thursday from a day ago, according to Metal Bulletin. ($1 = 6.5080 Chinese yuan) (Reporting by Ruby Lian in SHANGHAI and Ryan Woo in BEIJING; Editing by Kenneth Maxwell and Amrutha Gayathri)